Hospo operator fears fraught future

With New Zealand’s borders likely to remain closed for ages due to the Covid-19 pandemic, a veteran Queenstown hospo operator’s in no doubt his sector – currently in lockdown – faces very tough times.

“Without the international visitors, it’s going to be a really, really difficult time for the hospitality industry [when the lockdown’s over],” Prime restaurant owner Mark Jessop says.

“Some say there’ll be a boom in NZ visitors, but others would say that the NZers who get through this, somewhat unscathed, will be a little gun-shy about rushing around and spending money over the next six months.”

Jessop believes there’s “huge potential” that a lot of local hospo operators won’t reopen their doors “because of the fixed costs that many businesses face”.

He’s “definitely” intending to reopen, but cautions that “it’s not a just a question of opening and then we’re making money”.

“It’s how many months can I continue going down a losing-money path until we run out?”

What will help a lot is having a ski season, he says, even if it’s just for Kiwis.

“We always lose money in May and June anyway, so if we don’t have a ski season for NZers, then July and August will be just like May and June for us, which is a disaster.”

Jessop doesn’t think international tourists – who make up 70 per cent of Queenstown’s visitor mix – will come back for quite a long time, “because a) they’ve got to open the borders and b) they’ve got to have a testing regime which is acceptable to both the health authorities and the traveller”.

“Even if they go to Level 2 [from the current Level 4] before the winter, I don’t think that we’re going to have procedures in place for Australian skiers to come here.”

Jessop says he’d like to keep all his staff, “but if the turnover is a third or quarter of what it used to be, that will be difficult for many companies”.

With Queenstown so reliant on migrant labour, he suggests there’ll be a problem as he thinks more will leave than stay.

That’s because many just came for the summer season, while others could be feeling homesick during this extended period of no work.

“It would be a great solution if Kiwis come here to work – the housing costs will have dropped and there’ll be plenty of availability of housing.”

Jessop says he’s pleased some commercial landlords have been “very understanding” of their tenants’ plight to date.

“The next challenge, once we work out when we will be able to open at Level 2, is how we gradually restart realistic rent payments.

“We can’t start paying rental appropriate to a $2 million business if we are only likely to initially turn over $10,000 per week for many months.”

A solution, Jessop told Mountain Scene last month, is for landlords, for the foreseeable future, to base rent on a percentage of their tenants’ turnover.